Closing summary
Donald Trump has begun another trade war, announcing 25% tariffs on all steel and aluminium imports into the United States. This prompted countermeasures from the European Union and Canada, while Australia, the UK and other countries held back from announcing retaliatory action.
European stock markets have rallied, cheered by hopes of a ceasefire in Ukraine.
Keep up with the latest news on our US and UK politics live blogs:
Thank you for reading. We’ll be back tomorrow. Bye! – JK
Canada to impose 25% tariffs on nearly $30bn in US imports
Canada is retaliating with its own tariffs, from tomorrow.
In response to 25% tariffs imposed by Donald Trump on Canadian steel and aluminum imports, Canada’s finance minister, Dominic LeBlanc, says his country will tomorrow retaliate with levies of the same amount on almost $30bn in imports from the United States.
LeBlanc said at a press conference
I am announcing that the government of Canada, following a dollar for dollar approach, will be imposing, as of 12.01am, tomorrow, March 13, 2025, 25% reciprocal tariffs on an additional $29.8bn of imports from the United States.
This includes steel products worth $12.6bn and aluminum products worth $3bn, as well as additional imported US goods worth $14.2bn for a total of $29.8bn. The list of additional products affected by counter-tariffs includes computers, sports equipment and cast iron products, as examples.
It’s easy to forget that all countries are affected by US tariffs.
Brazil’s finance minister Fernando Haddad said that the South American country will not immediately retaliate against tariffs imposed by the United States on steel and aluminium imports, instead seeking negotiations.
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The relief rally on Wall Street, sparked by a dip in US inflation, is petering out.
The Dow Jones is now down 0.7%, the S&P 500 is flat and the Nasdaq, which rose 1.8% earlier, is only 0.7% ahead.
Here in Europe, the German and Italian equity markets are still more than 1% ahead while the French bourse has pared gains to trade 0.3% higher. The UK’s FTSE 100 index in London has edged 0.2% higher.
The dollar is having a better day after trading on Tuesday close to the four-month low it hit last Friday, rising by 0.3% against the basket of other major currencies. The pound is down a tad at $1.2939 while the euro is also slightly lower on the day, but back above the $1.09 level, at $1.0908.
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Starmer: Negotiating economic deal with US, but 'will keep all options on the table'
Speaking at prime minister’s questions in parliament, Sir Keir Starmer didn’t rule out retaliatory tariffs against the US.
I am disappointed to see global tariffs in relation to steel and aluminium, but we will take a pragmatic approach.
We are… negotiating an economic deal which covers and will include tariffs if we succeed.
But we will keep all options on the table.
You can read more on our politics live blog:
Canada to hit back with $20bn of counter-tariffs – AP
Canada is to hit back at Donald Trump’s 25% steel and aluminium tariffs with $20.7bn in retaliatory tariffs, Associated Press reported, citing a senior Canadian government official.
The EU has also announced retaliatory trade action with new duties on US industrial and farm products, responding within hours to the Washington’s increase in tariffs on all global steel and aluminium imported into the US to 25%.
Canada is the largest foreign supplier of steel and aluminium to the US.
BREAKING: Canada will announce more than $20 billion in retaliatory tariffs in response to U.S. President Donald Trump's metal tariffs, AP sources say. https://t.co/OHfmfwWa7J
— The Associated Press (@AP) March 12, 2025
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Bank of Canada cuts interest rates, citing trade tensions and US tariffs
While US interest rate cuts are uncertain despite the dip in inflation today, the Bank of Canada has taken action. It reduced its policy rate by a quarter of a percentage points to 2.75% from 3%.
The central bank is worried about the impact of US tariffs on the Canadian economy. It explains.
The Canadian economy entered 2025 in a solid position, with inflation close to the 2% target and robust GDP growth. However, heightened trade tensions and tariffs imposed by the United States will likely slow the pace of economic activity and increase inflationary pressures in Canada. The economic outlook continues to be subject to more-than-usual uncertainty because of the rapidly evolving policy landscape.
Bank of Canada reduces policy rate by 25 basis points to 2¾%https://t.co/ZnFzJbHkJV#economy #cdnecon
— Bank of Canada (@bankofcanada) March 12, 2025
BritishAmerican Business, a transatlantic trade and business group, representing more than 470 companies on both sides of the Atlantic, has responded to the US tariffs on steel and aluminium.
Its chief executive Duncan Edwards said:
The new US administration has set out to be a pro-business, pro-growth government and there is much in its agenda that our members will be encouraged by. However, imposing tariffs on a close trading partner like the UK does not feel helpful to either country. Rather than fostering economic growth, these measures introduce unnecessary friction in a strong and mutually beneficial trade relationship.
We welcome the UK government’s decision not to introduce its own retaliatory tariffs, and we hope discussions between the two governments can help reduce trade and investment barriers, strengthen economic ties, and ensure businesses on both sides of the Atlantic can thrive.
While US inflation has cooled, US tariffs threaten to push price growth higher again in coming months, warned James Knightley, chief international economist at ING.
He said:
Good news on inflation, but the fact it was overwhelmingly caused by falling airfares has muted the market reaction. Tariff fears are already seeing companies nudging prices higher and risk higher inflation readings over the summer.
Cooling US inflation sparks (limited) relief rally on Wall Street
There has been a bit of a relief rally on Wall Street following the slowdown in US inflation. The Dow Jones has edged 0.1% higher while the tech-heavy Nasdaq is 1.7% ahead and the S&P 500 index gained 0.7%.
Over here, European stock markets have notched up chunky gains despite the looming trade war between the United States and the European Union. Sentiment has been lifted by hopes of a 30-day ceasefire in Ukraine – although Russia is yet to respond to the proposal agreed by the US and Ukraine. The German, French and Italian indices are between 1.2% and 1.8% higher. The UK’s FTSE 100 index is only 0.3% ahead, up 25 points at 8,521.
The dollar has strengthened today following days of selling pressure sparked by “Trumpcession” fears. The greenback is trading 0.4% higher against a basket of major currencies. Sterling is down a smidgen at $1.29340 while the euro has lost 0.3%, dipping back below $1.09 to $1.0890.
Daniela Sabin Hathorn, senior market analyst at the trading platform Capital.com, said:
Consumer inflation has softened in February. That is the key takeaway from the latest data released on Wednesday. Both headline and core CPI came in lower than expected at 2.8% and 3.1% respectively. Additionally, both monthly readings also dropped from the previous month and came in below expectations at 0.2%.
As anticipated, the initial market reaction was a relief rally in US equities, accompanied by a weaker US dollar and lower yields. However, this momentum has struggled to sustain itself. The dollar and yields have rebounded from their initial knee-jerk declines, turning higher, while equity indices have found limited buying interest to push significantly higher.
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“Not as good as it looks” – is the verdict on the drop in US inflation from Thomas Ryan, North America economist at Capital Economics.
The softer 0.23% month on month rise in core CPI in February is not as encouraging at it looks, as the components which feed into the Fed’s preferred PCE price index rose more sharply. While it will depend a lot on the producer price index (PPI) data tomorrow, our preliminary calculations point to another above-target consistent 0.3% month on month gain in the core PCE deflator last month.
Core CPI inflation was pulled down by some much smaller gains in hospital services and motor vehicle insurance, as well as a sharp 4% month-on-month decline in airfares. None of those feed into PCE, however, although we assume that the PPI data tomorrow will also show at least moderate declines in the key airfare components.
Otherwise, food at home prices were broadly unchanged despite another 10% surge in egg prices. With energy prices also better behaved on the month, this led to a relatively soft 0.22% month-on-month rise in headline CPI, pulling down the annual rate to 2.8%, from 3.0%.
The upshot is that, absent a huge downside surprise in the PPI data tomorrow, inflation is still running too hot for the Fed to consider cutting interest rates. At next week’s meeting, we expect the Fed to reiterate that it is in no hurry to loosen policy again.
US inflation dips more than expected to 2.8%
Inflation in the United States has dipped more than expected to an annual rate of 2.8% last month.
The annual inflation rate, measured by the consumer price index, fell from 3% in January, and was lower than the 2.9% expected by economists.
Wall Street futures extended gains after the figures.
The core inflation rate, which strips out food and energy (they tend to be volatile), also came in lower than expected at 3.1% versus expectations of 3.2%, and down from 3.3% the previous month.
The industry group spiritsEUROPE said it is “extremely concerned” by the EU announcement of €26bn countermeasures against new US tariffs on global steel and aluminium exports.
It urged the EU and the US to “keep spirits out of unrelated disputes”.
Pauline Bastidon, trade & economic affairs director at spiritsEUROPE, said:
Yet again, spirit drinks have become collateral damage in an unrelated trade dispute. As highlighted in our numerous engagements with the European Commission over the last seven years, we fail to understand how this will help with the broader, unrelated dispute on steel and aluminium. The EU and US spirits sectors stand united in their steadfast commitment to maintaining transatlantic spirits trade tariff-free.
EU official uses 'stinking fish' analogy for negotiations
Irish prime minister Micheál Martin will be meeting Donald Trump in the Oval Office around 2.45pm London time where they will face the media before going into a bilateral meeting. Ahead of that he will have a breakfast meeting with JD Vance, with Ireland’s surplus trade with the US very much in the cross hairs.
An EU official this morning suggested it was pointless at this stage to try and negotiate with the US as tariffs were such a crude way to address imbalances and also warned that no EU leader has the competency to do so.
It is not very productive to now start negotiating about removing the tariffs. That’s a bit stinking fish theory, where you put a stinking fish on the table, and then you start negotiating to remove that stinking fish, and then you say, Wow, we have a great result. There’s no stinking fish on the table. That is not a very productive conversation,
the official said.
That is not our objective. What we are looking for in negotiations is a productive discussion about creating value to what is the largest trade and investment relationship in the world, which is the transatlantic relationship.
Updated
To recap: The EU has announced it will impose trade “countermeasures” on up to €26bn (£22bn) worth of US goods in retaliation to Donald Trump’s tariffs on steel and aluminium imports, escalating a global trade war.
The president of the European Commission, Ursula von der Leyen, called the 25% US levies on global imports of the metals “unjustified trade restrictions”, after they came into force at 4am GMT on Wednesday.
“We deeply regret this measure,” von der Leyen said in a statement, where she announced “strong, but proportionate” countermeasures would come into force from 1 April. “Tariffs are taxes, they are bad for business and worse for consumers. They are disrupting supply chains. They bring uncertainty for the economy,” she said.
The retaliatory measures include Brussels reimposing tariffs on US goods including bourbon whiskey, jeans and Harley-Davidson motorbikes, which it introduced during the first Trump term and later suspended after talks with his successor, Joe Biden.
These tariffs, which target notable US goods worth €4.5bn, often from Republican states, will snap back on 1 April. The list was worth €6.3bn in 2018 but has shrunk because of Brexit and declining US exports.
Separately, the commission plans further retaliation targeting goods worth €18bn, including a wide range of steel and aluminium products, as well as agricultural produce, such as poultry, beef, seafood and nuts. These tariffs would be imposed from mid-April, after a vote by EU member states and consultations with industry in an attempt to minimise damage to the European economy.
“We try to hit … where it hurts,” said a senior EU official, who said the bloc was targeting soya beans, which are grown in Louisiana, the state of the US speaker of the House, Mike Johnson. “We love soybeans, but we’re happy to buy them from Brazil or from Argentina or from anywhere else.”
While the commission announced that its measures would total €26bn, EU officials later said they would probably target €22.5bn of US goods, as some products are likely to be filtered out after talks with businesses and member states.
However, further steps have not been ruled out. France’s European affairs minister, Benjamin Haddad, said on Wednesday that the EU could “go further” in its response to the US tariffs. The measures “are proportionate”, Haddad told TF1 television. “If it came to a situation where we had to go further, digital services or intellectual property could be included,” he said.
EU officials hope that pressure on Republican states and US business will help bring about a deal.“We will always remain open to negotiation,” von der Leyen said. “We firmly believe that in a world fraught with geopolitical and economic uncertainties, it is not in our common interest to burden our economies with tariffs.”
Britain will not issue its own immediate measures in response to the US tariffs but the government said it would “reserve our right to retaliate”.
The introduction of EU measures came after a day of drama on Tuesday, when Trump threatened to double tariffs on Canadian steel and aluminium in response to Canadian threats to increase electricity prices for US customers.
The US president backed off from those plans after the Ontario premier, Doug Ford, agreed to suspend his province’s decision to impose a 25% surcharge on electricity exports to the states of Minnesota, Michigan and New York.
'This trade war serves no-one': business and trade committee chair pushes for tariff exemptions
The chair of the UK’s influential business and trade committee has urged the government to push to secure tariff exceptions, after the US began enforcing higher (25%) tariffs across the board on steel.
Next Tuesday, the committee will hold a session with steel industry representatives on support for the industry and its survival, but the latest tariffs will now be centre stage.
Liam Byrne, the chair of the cross-party committee, said:
This trade war serves no-one. The UK government must push for urgent negotiations with the US to secure exemptions, and work with British businesses to protect them from these damaging measures.
The US blanket 25% tariff on global steel imports is deeply concerning for UK industry, threatening jobs and competitiveness at a time when our steel sector is already under immense pressure.
Updated
Bridgnorth Aluminium operates the only fully integrated aluminium coil rolling plant in the UK and employs 330 people in Shropshire.
The company sells 20% of its volumes into the US and says the introduction of aluminium and steel tariffs will create uncertainty and, potentially, makes the business less competitive than the current system of quotas and exemptions.
Adrian Musgrave, head of sales at Bridgnorth Aluminium, said:
These tariffs add another dimension to the global uncertainty we are all currently dealing with.
If there is no movement on the 25% rate it will make trading with the US more difficult for us as a business, but it could also cause supply and cost issues for firms in America too.
For example, for a significant portion of our US sales, there is currently no US producer. This means there is no threat to domestic aluminium production, yet companies using our aluminium may soon be hit by rising costs.
What would we like to see? A deal between the UK and the US that removes tariffs all together or significantly reduces it from the 25% rate. This is something we are championing with the Department for Business and Trade and key manufacturing bodies, such as the Aluminium Federation, Confederation of British Metalforming and Make UK.
We are grateful for the engagement of the UK government and the manufacturing associations, who are all lobbying hard on our behalf.
The European Union exported €77.8bn of iron and steel and related articles last year.
It imported €73.1bn, resulting in a trade surplus of €4.7bn, according to the latest official figures from Eurostat, the EU’s statistics office, out this morning.
Compared with 2019, there was a substantial increase in the trade of these products: exports rose by 15.2%, or €10.3bn, and imports climbed by 23.7%, or €14bn. These increases occurred despite a decline in the physical weight of exports by 17.3% and imports by 1.6%, indicating that the value rise was primarily driven by increasing prices, Eurostat said.
For iron and steel, Türkiye was one of the main trading partners last year, occupying the first place in exports with a total of €6.2bn and third place in imports with €3.5bn.
The United States was the second biggest export partner with €5.4bn worth of iron and steel, followed by the United Kingdom (€4bn), Switzerland (€2.1bn) and Mexico (€1.7bn).
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'I feel utter anger': a movement to boycott US goods is spreading
‘I feel utter anger’: From Canada to Europe, a movement to boycott US goods is spreading.
The renowned German classical violinist Christian Tetzlaff was blunt in explaining why he and his quartet have cancelled a summer tour of the US.
“There seems to be a quietness or denial about what’s going on,” Tetzlaff said, describing his horror at the authoritarian polices of Donald Trump and the response of US elites to the country’s growing democratic crisis.
I feel utter anger. I cannot go on with this feeling inside. I cannot just go and play a tour of beautiful concerts.
Tetzlaff is not alone in acting on his disquiet. A growing international move to boycott the US is spreading from Scandinavia to Canada to the UK and beyond as consumers turn against US goods.
Most prominent so far has been the rejection by European car buyers of the Teslas produced by Elon Musk, now a prominent figure in Trump’s administration as the head of the “department of government efficiency” a special group created by Trump that has contributed to the precipitous declines in Tesla’s share price. About 15% of its value was wiped out on Monday alone.
The fall in Tesla sales in Europe has been well documented, as has a Canadian consumer boycott in response to trade tariffs and Trump’s calls for Canada to become America’s 51st state, but the past week has seen daily reports of cultural and other forms of boycotts and disinvestment.
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Germany, Ireland and Italy likely to be hit hardest by US tariffs
Only three EU countries operate a goods trade surplus with the US - Germany, Ireland and Italy - and are likely to be hit hardest by the US tariffs.
Germany’s trade surplus in goods was €57bn in 2023, according to official US data. In 2023, Germany sold€144bn worth of goods to the US. German made cars accounted for €22bn of that with live medical products including vaccines, blood, antisera and cultures accounting for another €11.4bn.
The US sold €87bn worth of goods to Germany including €8.25bn worth of cars.
Ireland has the second largest trade imbalance, a surplus of €50bn, according to official data for 2023, driven largely by the export of pharmaceuticals to the US from large US multinationals manufacturing in Ireland such as Pfizer. Agricultural products including butter are another big export.
In third place in 2023 was Italy which has a trade surplus was €41bn, selling about €65bn worth of goods to the US. Packaged medicines, cars accounted for about €5bn and €4.66bn of all exports respectively.
US exports to Italy, were worth about €24bn in 2023, dominated by crude oil, hormones and gas, according to official US data.
The UK’s GMB union says the tariffs are “potentially disastrous for all sides”.
Charlotte Brumpton-Childs, GMB national officer, said:
The USA gains nothing and in many instances will be undermining its own manufacturing industry.
There are shipments currently in the Atlantic, delayed by bad weather that could be subject to tariffs that weren’t planned to be.
The government is using all levers available and GMB is still hopeful we can get a common sense outcome.
We must not take our eye off the EU and their response to tariffs which could further compound the pressure the UK industry will face.
EC president announces EU countermeasures to US tariffs from April
Here is European Commission president Ursula von der Leyen announcing the EU’s countermeasures this morning.
As of this morning, the United States is applying a 25% tariff on imports of steel and aluminium. We deeply regret this measure.
Tariffs are taxes. They are bad for business and worse for consumers. They are disrupting supply chains. They bring uncertainty for the economy. Jobs are at stake. Prices up. Nobody needs that on both sides, neither in the European Union nor in the United States.
The European Union must act to protect consumers and business.
She said the counter measures “are strong but proportionate”. As the United States is applying tariffs worth $28bn, the EU is responding with countermeasures worth €26bn. She added:
In the meantime, we will always remain open to negotiations.
Updated
“The latest announcement on tariffs stretches far wider than the global steel and aluminium industry. Unilateral tariffs of this nature break international law,” said Chris Southworth, secretary general of the International Chamber of Commerce United Kingdom.
He explained:
The bigger message from the Trump administration is everybody is now in the firing line, whether we’re allies, friends or foes, G7, G20, NATO, everybody is now in the frame for tariffs from the US.
This is a completely non-discriminatory approach, that will absolutely damage the long term reputation of the U.S as a reliable partner.
This a critical moment for the global community, who now need to pull together, and respond collectively. The UK has an incredibly important role to play in that response, by helping to broker a dialogue with the US to get to a solution, that can work for everybody.
It is hard to see how companies will now not now pause investment and be looking to potentially reroute trade away from the US to less volatile markets.
He warned that this will impact American businesses too – especially in the aerospace, automotive and construction.
The UK plays an incredibly important role in the international community. We’re a G7 economy, we’re a big ally of the US, we work very well with the US. However, in this particular case, we need to use our pragmatism and leverage the deep relationships we have with lots of countries around the world, whom will be looking at this with deep concern, and facilitate a better solution.
ECB chief warns trade, defence shocks could lead to persistent inflation
The eurozone economy is facing exceptional shocks from trade, defence and climate issues, which could increase inflation volatility and raise the risk that price growth becomes more persistent, according to European Central Bank president Christine Lagarde.
Giving a speech in Frankfurt, she said it is imperative that the bank doubles down on its 2% inflation target and outlines how it reacts to various shocks.
Our expectations have indeed been swept aside in the last few years, and in the last few weeks in particular. We have seen political decisions that would have been unthinkable only a few months ago.
The central bank, which sets interest rates for 20 EU countries that form the eurozone, has cut rates six times in since June but provided no clear hint about future policy last week, leaving markets guessing.
Lagarde said trade fragmentation is likely to lead to larger, more disruptive price changes and could in principle, much like extra defence spending, lead to higher inflation. But there similarly a risk that such shocks counteract each other and extinguish price pressures, she argued.
The key issue for the ECB is that inflation reacts disproportionately more strongly to large shocks than small ones, and such large shocks could make inflation more durable.
These disproportionate price reactions, coupled with the current wage setting mechanism, risk creating persistent inflation problems, she warned.
If such state-dependent pricing becomes standard when the economy is hit by large shocks, but the frequency of wage-setting remains below that of price adjustment, we could see inflation becoming more persistent.
Large shocks would lead to a faster pass-through to inflation, and then wages would have to catch up with prices in a staggered way.
Lagarde did not offer a solution but argued that the ECB must be clear in what it can and cannot do. It means the central bank cannot promise to keep inflation at 2% all times and cannot give specific guidance about where policy is going.
But the bank must set policy so inflation is always converging towards 2% over the medium term and it must outline its “reaction function,” so firms and households will always know how a particular shock will impact policy.
The ECB president said:
We can be clear about our reaction function, and notably how we are likely to be affected by changing circumstances and what kind of data we will look at.
Meanwhile, Donald Trump appeared with Tesla founder Elon Musk at his side, to pick a Tesla from five vehicles parked on the White House driveway.
He said he would buy one to support Musk, whose electric car company’s shares tumbled by 15% on Monday, its worst one-day drop since 2020. There has been a backlash against the entrepreneur for his influence over the US government and the work of his cost-cutting task force, the Department of Government Efficiency (DOGE).
“I’m going to buy,” the US president said.
Number one, it's a great product, as good as it gets—and number two, because @ElonMusk has devoted his energy and his life to doing this and I think he has been treated very unfairly… pic.twitter.com/6qrfwrbT0f
— Donald J. Trump (@realDonaldTrump) March 12, 2025
Naomi Smith, chief executive of the campaign group Best for Britain said the UK must respond to US tariffs with deeper EU ties.
Trump is waging trade war on America’s closest allies that will result in higher prices for ordinary people around the world.
The UK’s response must be to deepen ties with the EU which independent research shows will not only shield the UK and Europe from Trump’s tariffs, but deliver significant economic growth across Britain.
European Commission president Ursula von der Leyen has been in touch with the taoiseach Micheál Martin over the weekend ahead of his meeting with Donald Trump today, European Commission officials have confirmed.
However they do not expect the taoiseach or any other leader to engage on trade negotiations as that is an EU competency, rather than a national one.
Updated
Donald Trump first doubled tariffs on Canadian steel and aluminium imports to 50% on Tuesday after Ontario introduced a 25% surcharge on electricity exports to the US. Then the US president backed down and suspended the plan.
But 25% levies on all global steel and aluminium imports into the US did come into effect, prompting a swift response from the European Union, which is imposing 25% tariffs on €26bn in US goods from April.
It’s unclear whether the UK will retaliate (certainly not imminently).
Neil Wilson, analyst at research platform TipRanks, is talking of “tariff fatigue”. He said about the UK:
It’s playing a longer game with Trump it seems. It’s exhausting keeping up with it all.
The market is tired too. It was a difficult day for traders on Wall Street [on Tuesday]. The S&P 500 ended the session 0.76% lower at 5,572.07. At the low of the day it was 10% below its record close – defined as a ‘correction’. The volatility index neared 30 to hit its highest in two and a half years. European stock markets opened higher on Wednesday.
Yesterday Citi downgraded US stocks to neutral and upgraded Chinese equities, noting that ‘US exceptionalism is at least pausing.’ In the longer term, they write, USequity outperformance may return when the AI narrative takes over again, but they expect US growth momentum to undershoot the rest of the world in the coming months.
It may be worth considering that the selling fatigue may start to kick in soon and there is ample room now for a rebound in both US equities and the dollar as sentiment can shift on a dime. Buy the dip is not gone.
On the data front today look out for US CPI inflation - expected +0.3% month-over-month for both the headline and core readings. The dollar is priced heavily to the downside view and risks therefore will be sensitive to anything hawkish. The Bank of Canada can afford to make another tariff-insurance cut today.
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Taoiseach Micheál Martin is meeting Donald Trump at 10am US time for the annual St Patrick’s Day celebrations, a week early this year because of congressional recess, my colleague Lisa O’Carroll reports from Dublin.
The Irish prime minister plans to tell Trump that the trade imbalance raised by secretary of state Marco Rubio in a phone call with the Irish foreign minister last week masks the complexity of the relationship.
He will point out that among Boeing’s biggest customers are Ryanair and Aercap, the world’s largest aircraft leasing company, which could now be impacted by tariffs.
Updated
Trump tariffs cover household goods e.g. tin foil
Like last time, in June 2018 when the first Trump administration imposed tariffs on global steel and aluminium imports, today’s 25% tariffs cover plenty of familiar household goods.
Different types of semifinished and finished products, such as steel pipes, wire and tin foil, are included.
The tariffs have been extended to other products, such as stainless steel cooking ware, window frames, doors, and goods only partly made from steel or aluminium, such as machinery, gym equipment and some electrical appliances.
You can read more on the European Commission’s explainer here.
In addition, the US secretary of commerce will establish today a system whereby the US will continue to extend the list of steel and aluminium derivatives products subject to additional duties of up to 25%.
The US tariffs will affect a total of €26bn of EU exports, which corresponds to about 5% of total EU goods exports to the US. Based on current import flows, this will result in US importers having to pay up to €6bn in additional import tariffs.
European stock markets rise amid hopes of ceasefire in Ukraine; dollar gains
European stock markets have risen at the open, lifted by hopes of a ceasefire in Ukraine, while the dollar has strengthened against a basket of major currencies.
The FTSE 100 index in London has gained 17 points, or 0.2%, to 8,513, while Germany’s Dax and France’s CAC both advanced by 0.9%, Spain’s Ibex rose by 0.6% and Italy’s FTSE MiB initially climbed by 1% and is now 0.86% ahead.
Ukraine said it was ready to accept an immediate 30-day ceasefire in the war with Russia, as the US announced it would immediately lift its restrictions on military aid and intelligence sharing after high-stakes talks in Saudi Arabia. This seems to have offset worries about the new US steel and aluminium tariffs in stock markets.
The dollar, which has been under a lot of selling pressure in recent days, has risen by 0.3% against rival currencies. Sterling has edged 0.15% lower to $1.2926 while the euro is down by a similar amount, but remains above the $1.09 level – at $1.0903.
In Asia, Japan’s Nikkei was broadly flat (up 0.07%) while Hong Kong’s Hang Seng fell by nearly 1% and Chinese exchanges edged about 0.2% lower. The Australian market lost 1.3%.
Susannah Streeter, head of money and markets at Hargreaves Lansdown:
As the ‘Trump bump’ has turned into a slump, investors are bracing for fresh volatility ahead. The impact of tariffs is front of mind, given broad 25% duties on imports of steel and aluminium have come into effect, with the risk of tit-for-tat retaliation high. China has already responded with higher duties on American goods and the EU is planning counter tariffs, which are expected to come into force in April.
The disquiet evident among investors on Wall Street, spread to Asia, with the Nikkei flat and Chinese indices in the red. London’s FTSE 100 [has seen] a small rebound, buoyed by hopes for a ceasefire in Ukraine. The easing of geopolitical concerns will help improve sentiment to some extent, but investors will still be mulling the impact of tariffs on global growth and prospects for multinationals in an increasingly complex trading world.
UK steel exporters are bracing for harsh winds to blow a storm through the industry, which has already been battered by higher energy costs, weaker demand, and over-supply on world markets.
You can follow the latest on Ukraine here:
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Community Union: Tariffs 'hugely damaging and threaten jobs'
Community Union, Britain’s steelworkers’ union says the tariffs are “hugely damaging” and threaten jobs – and “self-defeating” for the United States.
Alasdair McDiarmid, Community’s assistant general secretary, said:
These US tariffs on UK steel exports are hugely damaging and they threaten jobs. For the US it’s also self-defeating, as the UK is a leading supplier of specialist steel products required by their defence and aerospace sectors.
The UK’s response must include delivering a robust Carbon Border Adjustment Mechanism (CBAM) and the strongest possible trade defence measures to shield our sector from diverted imports.
We’re incredibly disappointed that the US has decided to take this course of action, and we will continue to work with steel companies and the UK government to deliver the best possible outcome for our members and our industry.
Unite: UK-produced steel should be designated critical national infrastructure
Unite, the UK’s biggest union, is calling on the government to immediately designate UK-produced steel as critical national infrastructure.
Unite believes there should be strict procurement rules for public sector projects to ensure they always use UK produced steel, and that that all future major infrastructure projects should be required to use UK produced steel.
By designating steel as a critical national infrastructure, in the interests of national security, the government would not be breaking competition rules.
Unite general secretary Sharon Graham said:
Our government must act decisively to protect the steel industry and its workers following the announcement of US tariffs.
This is a matter of national security. Steel should be immediately designated as critical national infrastructure to properly protect it.
Given the importance of steel to our economy and our everyday lives it is vital it is designated as critical national infrastructure and rules are introduced to ensure that the public sector always buys UK produced steel.
Unite is a member of the government’s steel council and said it will fight to ensure that the government’s £2.5bn investment in the industry is used to develop green steel connected with job guarantees.
European steel companies have been bracing for losses.
“It will further worsen the situation of the European steel industry, exacerbating an already dire market environment,” Henrik Adam, president of the Eurofer European steel association, said last month.
He said the EU could lose up to 3.7m tons of steel exports. The United States is the second biggest export market for EU steel producers, representing 16% of the total EU steel exports.
“Losing a significant part of these exports cannot be compensated by EU exports to other markets,” Adam said.
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Treasury minister: UK reserves right to retaliate but will be 'pragmatic'
The UK is in a “very different position than the EU” and does not want to be “pushed off course” by global tariffs imposed by Donald Trump from its pursuit of an economic deal with the US, a Treasury minister has insisted.
The UK reserves its right to retaliate but will adopt a “pragmatic” approach in response to global tariffs imposed by the US, James Murray, exchequer secretary to the Treasury, said, echoing the comments (verbatim) made by the UK’s trade and business secretary, Jonathan Reynolds.
Asked whether Britain’s response to the tariffs could be called weak in comparison with Brussels, Murray told Sky News:
Well, we’re in a very different position than the EU as a result of the prime minister’s trip to Washington last month.
The UK and the US have been negotiating rapidly for an economic agreement, and so we’re in a position where that negotiation is ongoing and these global tariffs, if you like, have landed in the middle of that work. So we don’t want to be pushed off course by this.
We want to carry on with our rapid negotiation toward an economic agreement, because we think that’s in the best interest of British businesses and the British public.
Murray said the UK should avoid a “knee-jerk response”.
We think the right response is to continue pragmatically, cool-headedly, without a knee-jerk response, but toward our economic agreement that we’re negotiating with the US to secure, because that’s in the best interests of the UK.
Asked whether the imposition of retaliatory tariffs would remain on the table, Murray told Times Radio:
We reserve our right to retaliate, but we’re very clear that we want a pragmatic approach, working closely and productively with the US.
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UK Steel: Tariffs will have 'hugely damaging consequnces'
The tariffs will have “hugely damaging consequences for UK suppliers and their customers in the US,” the UK’s industry group UK Steel warns. They will also have a further harmful indirect effect of deflecting steel trade from the US into markets like the UK. Further reciprocal tariffs are expected to be announced by the US on 2 April.
The US is the UK’s second most important export market for steel after the EU, particularly as it is a high value market, UK Steel explains. US exports account for 9% of UK steel exports by value and 7% by volume. This is mostly specialist steel that goes into areas such as defence, oil and gas, construction equipment and packaging.
This comes at a time of global overcapacity and oversupply, high energy costs, and weak demand, making the the blow to UK exports “all the more detrimental”.
UK Steel director general, Gareth Stace, said:
Today’s imposition of tariffs on UK steel from the US administration is hugely disappointing. President Trump must surely recognise that the UK is an ally, not a foe. Our steel sector is not a threat to the US, but a partner to key customers, sharing the same values and objectives in addressing global overcapacity and tackling unfair trade.
These tariffs couldn’t come at a worse time for the UK steel industry, as we battle with high energy costs and subdued demand at home, against an oversupplied and increasingly protectionist global landscape. What’s more, the EU is also pushing ahead with trade restrictive action that will amplify the impact of US tariffs.
It is essential that the UK Government not only continues efforts to negotiate exemptions with the US, but also takes decisive action to bolster our trade defences. We greatly appreciate all the efforts that have been made so far and will continue working closely with our Government to secure the best possible outcome.
The UK is only partially shielded from trade diversion. Steel safeguard quotas have been liberalised every year and are now 22% larger than when they were first introduced in 2018. At the same time, UK demand has contracted by 16%. These quotas are oversized and do not offer adequate protection from the large-scale trade diversion that is likely to take place, UK Steel says.
These measures will lapse in June 2026. It is essential that existing measures are tightened, as the EU is doing with its own measures, and concrete plans are put in place for the replacement of safeguards, ideally well before their expiry. There is a huge amount of momentum around steel in the EU, including its Steel and Metals Action Plan which will be presented on 19 March. This will further add to the pressure both on the UK’s direct exports, as well as our trade defences.
Julia Kollewe in London has taken over the live blog.
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More on Europe’s tariff countermeasures
The European Commission said steel and aluminium products would be hit with tariffs in return, but also textiles, leather goods, home appliances, house tools plastics and wood. Agricultural products will also be impacted — including poultry, beef, some seafood, nuts, eggs, sugar and vegetables.
The commission’s president Ursula von der Leyen said:
We will always remain open to negotiation. We firmly believe that in a world fraught with geopolitical and economic uncertainties, it is not in our common interest to burden our economies with tariffs.
Donald Trump has said his taxes would help create US factory jobs, but von der Leyen warned:
Jobs are at stake. Prices will go up. In Europe and in the United States.
We deeply regret this measure. Tariffs are taxes. They are bad for business, and even worse for consumers. These tariffs are disrupting supply chains. They bring uncertainty for the economy.
The UK prime minister, Keir Starmer, said yesterday that Britain would not hit back with its own counter-tariffs, after last-ditch efforts to persuade Trump to spare British industry from his global tariffs appeared to have failed.
Read the full story below:
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Tariffs 'disappointing' says UK's trade secretary
Here is some reaction from the UK with Britain’s trade and business secretary Jonathan Reynolds saying on Wednesday that he was disappointed with the US imposed tariffs on steel and aluminium.
Reynolds said:
I will continue to engage closely and productively with the US to press the case for UK business interests.
We are focused on a pragmatic approach and are rapidly negotiating a wider economic agreement with the US to eliminate additional tariffs and to benefit UK businesses and our economy.
I will continue to engage closely and productively with the US to press the case for UK business interests. We will keep all options on the table and won’t hesitate to respond in the national interest.
He added that the government remains “resolute” in its support for UK industry.
This government is working with affected companies today, and I back industry’s application to the Trade Remedies Authority to investigate what further steps might be necessary to protect UK producers.
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US tariffs a 'dog act', says Australia's industry minister
Ed Husic, Australia’s industry and science minister, spoke to ABC TV on Wednesday and was asked if he considered tariffs as the way to treat a good friend and ally.
Husic responded:
Let’s call a spade a spade. I think this is a dog act after over a century of friendship.
Australians have stood by and stood with Americans for many decades. In fact, Australians have spilled blood alongside Americans in different conflicts. We have stood together not just from a national security perspective but from an economic security perspective as well, trying to improve trade relationships between countries because it is good for economies and workers when done right.
What we have seen here, what has it been for?
EU provides timing of tariff countermeasures
The European Commission said on Wednesday it would impose “countermeasures” starting from 1 April in response to US tariffs of 25% on steel and aluminium imports.
European Commission chief Ursula von der Leyen said in a statement that Brussels would be “launching a series of countermeasures” in response to the “unjustified trade restrictions”.
The EU must act to protect its consumers and business.
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Opening summary
Hello and welcome to our live coverage of the global response to Donald Trump’s new tariffs. The 25% global tariffs on steel and aluminium came into effect at midnight ET “with no exceptions or exemptions”.
The European Commission responded almost immediately, saying it would impose counter tariffs on €26bn ($28bn) worth of US goods from next month.
“We deeply regret this measure,” European Commission chief Ursula von der Leyen said in a statement about the US tariffs, as Brussels announced it would be “launching a series of countermeasures” in response to the “unjustified trade restrictions”.
Australian deputy prime minister Richard Marles said on Wednesday the lack of exemptions was “really disappointing”, calling tariffs “an act of kind of economic self-harm”. He told radio station 2GB:
We’ll be able to find other markets for our steel and our aluminium and we have been diversifying those markets.
You can read the full story here and stick with us for all the developments as they unfold.
The Agenda
12.30pm GMT: US inflation for February (previous: 3%, forecast: 2.9%)
1.45pm GMT: Bank of Canada interest rate decision (forecast: cut to 2.75% from 3%)
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